Foreign state money has started buying in Makkah, and the developer that sold to it is now reshaping its sales plan around buyers that want scale.
Thakher Development Company, master developer of Thakher Makkah north of the Grand Mosque, completed the transfer of a hotel and 14 plots to Danantara, Indonesia’s sovereign wealth fund, last month.
Danantara said it took over the 1,461-room Novotel Thakher Makkah in August and completed the land purchase in October, in a deal worth $553 million.
The new playbook
Thakher now plans to focus on selling entire blocks to large investors, while still offering single plots, Chief Executive Officer Faisal Shaker told Construction Week Saudi in an interview last week.
A one-plot sale takes as much work as a big one, he said. Thakher has four large blocks left to sell.
When the Danantara deal closed, Shaker described Indonesia as the first foreign country to own property in the Thakher area.
What Danantara wants
The fund plans an integrated complex for Indonesian Hajj and Umrah pilgrims on the plots.
It isn’t stopping there. Danantara Chief Executive Officer Rosan Roeslani has said the fund also plans to buy land about 600 meters from the Grand Mosque.
The bigger picture
The law letting non-Saudis own property took effect in January, with specific rules for Makkah and Madinah. Since then, land near the Grand Mosque has been selling at twice its book value.
Danantara’s purchase is one of the first big tests of the new rules, and a sign of the kind of buyer they attract: institutions planning for millions of pilgrims a year.
Why it matters
Bulk sales mean fewer, bigger deals and faster cash for developers. For brokers and smaller buyers, they could mean less land reaching the open market in the most sought-after zones.
What to watch
Whether other countries’ funds follow Indonesia, and what they pay per block.
